1

Press release

SKF Year-end report for 2000

SKF's operating margin for the full year of 2000 amounted to 9.2% (6.9) and for the

fourth quarter to 9.0% (9.2). Excluding non-recurring items, the margin was 9.0% (5.8)

for the full year and 9.0% (7.3) for the fourth quarter.

Market demand for SKF's products and services developed well last year in Europe,

where SKF has half its sales. Demand declined in North America, especially in the

automotive segment. In Asia, demand weakened in a number of countries after a strong

start at the beginning of the year.

Market development during the fourth quarter confirmed that demand had begun to

weaken. Production levels were lowered in most of SKF's factories at the end of last

year in order to adapt the manufacturing to a period of weaker demand.

��The SKF Group increased its profit before tax to MSEK 3 002 (1 769), excluding

non-recurring items, MSEK 2 902 (1 381). Profit for the fourth quarter was MSEK

761 (693), excluding non-recurring items, MSEK 761 (518).

��The operating profit for the year amounted to MSEK 3 674 (2 520). The figure for

the fourth quarter was MSEK 941 (851).

��Cash flow after investments before financing amounted to MSEK 2 880 (2 219).

Cash flow for the fourth quarter was MSEK 1 088 (417).

��Net sales for 2000 amounted to MSEK 39 848 (36 693), an increase of 8.6%

compared with 1999. Net sales for the fourth quarter amounted to MSEK 10 459

(9 300), an increase of 12.5% compared with the corresponding period in 1999.

��The increase in net sales for 2000 was attributable to: structure -0.5% volume

+5.1%, price/mix +1.6% and currency effect +2.4%. A comparison between the

fourth quarter 2000 and 1999 shows: structure +0.4% volume +2.4%, price/mix

+2.8% and currency effect +6.9%

��Net profit amounted to MSEK 1 962 (1 111) and profit per share to SEK 17.23

(9.76). Net profit for the fourth quarter was MSEK 532 (416).

��The Board proposes that a dividend of SEK 5.25 (4.00) per share be paid for the

2000 financial year.

2

The Group's financial net for 2000 was MSEK -672 (-751). Interest-bearing loans at

year-end 2000 totalled MSEK 4 968 (5 976), while pension liabilities amounted to

MSEK 6 746 (6 478). At year-end, the Group had financial assets of MSEK 4 557

(2 894), whereof short-term financial assets of MSEK 3 481 (1 976). Group solvency at

year-end was 37.2% (33.8).

Additions to tangible assets totalled MSEK 1 388 (1 230). Of the Group's total additions

to tangible assets, approximately MSEK 47 (98) was invested in measures to improve

the environment both internally and externally. Depreciation according to plan was

MSEK 1 572. The comparable figure for 1999 was MSEK 1 725.

Expenditure in research and development amounted to MSEK 710 (756), corresponding

to 1.8 % (2.1) of annual sales. Development expenditure for IT solutions and

customized designs is not included. The number of first-time patent applications in 2000

was 144. The number in 1999 was 129.

The average number of employees was 39 557 (40 747) and the registered number of

employees was 40 401 (40 637).

At the end of December, the Group's inventories amounted to 23.2% (23.5) of annual

sales. Return on capital employed for the 12-month period ended December 31 was

16.2% (11.2). Return on equity was 16.0% (10.2).

During the year, SKF continued to prioritize profitability and to focus on moving

business to higher valued products and services. Non-profitable businesses were

discontinued and price increases were implemented.

Sales developed well for most of SKF's products and services during the first half of the

year. They were strong in Europe throughout the year, particularly in Germany. Sales

declined in North America. In the Asia-Pacific region there was a significant difference

between the larger markets. While SKF's sales increased rapidly in China, they declined

in India. Sales in South East Asia were much higher than in 1999, but they weakened

during the year.

Sales developed positively in Central and Eastern Europe, and SKF strengthened its

position on this market. Last year saw a healthy recovery as regards sales in Latin

America and they increased substantially in Africa and the Middle East, particularly

during the second half of the year.

The Group continued to reduce assets. Real estate was sold for MSEK 321. Last year the

European steel ball manufacturing and the Group's machine tool business were divested.

During the year, opportunities to sell the Steel Division were considered without leading

to a deal. For the near future the Division will be kept within the Group.

SKF's decision to launch an e-business market place, endorsia.com™, has given the

Group a leading position in e-business in the bearing world. By the end of 2000, some

1 400 users in 23 countries were connected to the marketplace.

3

The recently announced cooperation agreement in the e-commerce and logistics field

between SKF, Rockwell, Timken, INA and Sandvik is aiming at providing the industrial

aftermarket with extended and more efficient services.

Divisions

The result by Division is based on SKF management reporting.

Industrial Division

External sales in 2000 amounted to MSEK 8 605 (8 011), an increase of 7.4%. Total

sales (sales to external and internal customers) were MSEK 14 496 (13 147). The

Division's operating result was MSEK 1 588 (961) with an operating margin of 11.0%

(7.3).

The operating result was good throughout the year, due primarily to high capacity

utilization, better prices and an increase in the business for value added products and

solutions.

Sales in Europe, the Division’s largest market developed strongly in the second half of

the year. In North America sales began to slow down during the second quarter and in

Asia they remained flat over the year.

Sales to light industry developed more positively than sales to the heavy equipment

industry.

A number of companies were acquired during the year:

- Electrac SA, manufacturer of electromechanical actuators,

- Revolve Magnetic Bearings Inc., manufacturer of magnetic bearing systems.

- MTSR Ltd, machine tool service company,

- Roller Bearing Industries Inc., a rail-bearing service company.

The Automotive Division

External sales in 2000 amounted to MSEK 8 882 (8 527), an increase of 4.2%. Total

sales (sales to external and internal customers) were MSEK 9 883 (9 676). The

Division's operating result was MSEK 376 (237) with an operating margin of 3.8%

(2.4).

Although still on an unsatisfactory level, the operating result in 2000 increased by nearly

60% compared with 1999. This has resulted from the focus on cost reductions and from

promoting higher value added products.

Sales to the car and light truck segment remained stable in Europe throughout the year.

The North American market weakened in the second half of the year. Sales in Brazil,

however, developed positively after the crisis in 1999.

Sales in India were weak for both the car and the truck segments.

4

The European sales for heavy trucks remained at a high level throughout the year in

contrast to North America, where sales fell heavily from the record level in 1999.

The vehicle aftermarket in Europe weakened during the second half of the year, due to

weaker demand and de-stocking. The same applied to the vehicle aftermarket in North

America, which is managed by the Seals Division.

The Division formed a Drive-by-Wire Business area in 2000. SKF signed a joint

development agreement with Brembo, Italy, to develop Brake-by-Wire solutions for the

car industry.

The Electrical Division

External sales in 2000 amounted to MSEK 1 575 (1 475), an increase of 6.8%. Total

sales (sales to external and internal customers) were MSEK 6 169 (5 949). The

Division's operating result was MSEK 460 (219) with an operating margin of 7.5%

(3.7).

The doubling of the operating result was due mainly to increased sales volumes in

Europe and in the USA, and to the offer of more types of innovative products, mainly to

the power tools segment.

Sales in Asia were good, in particular in the two-wheeler segment. Efforts to improve

profitability in all the markets continued, and unprofitable businesses were exited in

favour of customized solutions.

Several new solutions based on the use of sensors in bearing applications were

developed and introduced during the year.

The Service Division

External sales in 2000 amounted to MSEK 12 844 (11 380), an increase of 12.9%. Total

sales (sales to external and internal customers) were MSEK 13 854 (12 173). The

Division's operating result was MSEK 1 013 (848) with an operating margin of 7.3%

(7.0).

High sales activity, positive price development and high performance in logistics

contributed to the result.

During the first half of the year, there was a positive sales development in most markets.

However, in the second half of the year, sales slowed down. Sales in Central and

Eastern Europe continued to grow strongly all through the year. The Middle East and

Africa recovered in the second half of 2000.

A growing number of maintenance and condition-monitoring contracts were concluded

during the year with customers in the process industry.

Several acquisitions strengthened SKF's position within the service business:

- Development Engineering International Ltd. (DEI). Services for maintenance

engineering.

5

- Machine Support BV. Services within laser alignment.

- Diagnostic Instruments Ltd. (DI). Industrial mobile computing equipment.

The Seals Division

External sales in 2000 amounted to MSEK 4 130 (3 750), an increase of 10.1%. In local

currencies, sales were at the same level as in 1999. Total sales (sales to external and

internal customers) were MSEK 4 728 (4 313). The Division's operating result was

MSEK 127 (49) with an operating margin of 2.7% (1.1).

The year opened with good demand, particularly in North America. The restructuring

measures undertaken in 1999 started to show results. The delivery service level was

restored. The Division's high exposure to the North American automotive market led to

a strong decline in sales and lower margins during the second half of the year.

The Steel Division

The external sales in 2000 amounted to MSEK 1 838 (1 572), an increase of 16.9%.

Total sales (sales to external and internal customers) were MSEK 4 481 (4 057). The

Division's operating result was MSEK 173 (54) with an operating margin of 3.9% (1.3).

The market, which turned upwards at the end of 1999, continued to be good and the

demand for steel products was high. A flattening of demand occurred at the end of the

year.

The operating result trebled during the year. Technical problems and an unfavourable

cost development in the Swedish operations were the main reasons for the weak

development of the result in the second half of the year.

The strategy to develop a customer base outside SKF showed good results.

The Aerospace business

SKF's aerospace business developed favourably during the year. The business reached

external sales of close on MSEK 1 700 in 2000 and employed 1 920 people.

During the year, a five-year contract was signed with Aerospatiale-Matra Airbus for the

supply of airframe bearings and metallic composite rods. The total value of the contract

is MSEK 500.

Göteborg, January 29, 2001

Aktiebolaget SKF

(publ.)

Sune Carlsson

President

6

Enclosures:

Consolidated financial information

Consolidated balance sheets

Consolidated statements of cash flow

Consolidated financial information - yearly and quarterly comparisons (Group and Divisions)

This report has not been audited by the Company's auditors.

The SKF Annual Report 2000 will be published on Friday, March 9, 2001

and will be available at the Company as of that date.

The report on SKF's first-quarter earnings in 2001 will be published

on the date of the Company's Annual General Meeting on Tuesday, April 24, 2001.

Further information can be obtained from:

Lars G Malmer, Group Communication, tel +46-705-371541, e-mail: lars.g.malmer@skf.com

Marita Björk, Investor Relations, tel +46-705-181994, e-mail: marita.bjork@skf.com

Aktiebolaget SKF, SE-415 50 Göteborg, Sweden

telephone +46-31-3371000, fax +46-31-3372832, www.skf.com

7

Enclosure 1

CONSOLIDATED FINANCIAL INFORMATION (MSEK)

2000 1999

MSEK % MSEK %

-------- -------- -------- --------

Net sales 39 848 100.0 36 693 100.0

Cost of goods sold* -30 143 -75.6 -28 822 -78.5

Gross profit 9 705 24.4 7 871 21.5

Selling and administrative expenses* -6 220 -15.6 -5 754 -15.7

Other operating income/expense - net 182 0.4 403 1.1

Result of associated companies 7 - - -

Operating profit 3 674 9.2 2 520 6.9

Financial income and expense - net -672 -1.7 -751 -2.1

Profit before taxes 3 002 7.5 1 769 4.8

Taxes -1 001 -2.6 -650 -1.8

Profit after taxes 2 001 4.9 1 119 3.0

Minority interest -39 - -8 -

Net profit 1 962 4.9 1 111 3.0

Earnings per share after tax, SEK 17.23 9.76

Number of shares 113 837 767 113 837 767

Additions to tangible assets 1 388 1 230

Number of employees registered 40 401 40 637

Return on capital employed for the

12-month period ended Dec 31, % 16.2 11.2

* Beginning in 2000, operating expenses for the Group are classified as cost of goods sold and/or selling

and administrative expenses based on the type of operation rather than the type of expense.

Previous years have been restated in accordance with new principles.

8

Enclosure 2

CONSOLIDATED BALANCE SHEETS (MSEK)

2000 1999

------------ ------------

Intangible assets 1 545 1 829

Tangible assets 13 089 13 074

Investments and long-term financial assets 1 404 1 114

Total capital assets 16 038 16 017

Inventories 9 262 8 640

Short-term assets 9 033 8 190

Short-term financial assets 3 481 1 976

Total short-term assets 21 776 18 806

TOTAL ASSETS 37 814 34 823

Shareholders' equity 13 594 11 367

Provisions for pensions and

other postretirement benefits 6 746 6 478

Provisions for taxes 1 596 1 509

Other provisions 3 046 2 795

Total provisions 11 388 10 782

Long-term loans 4 263 4 753

Other long-term liabilities,

including minority interest 561 477

Total long-term liabilities 4 824 5 230

Short-term loans 705 1 223

Other short-term liabilities 7 303 6 221

Total short-term liabilities 8 008 7 444

TOTAL EQUITY, PROVISIONS

AND LIABILITIES 37 814 34 823

9

Enclosure 3

CONSOLIDATED STATEMENTS OF CASH FLOW (MSEK)

2000 1999*

----------------- ------------------

Profit before taxes 3 002 1 769

Depreciation on tangible assets

and goodwill amortization 1 633 1 873

Net gain on sales of tangible assets

and businesses -227 -248

Taxes -166 -355

Changes in working capital -306 -74

Cash flow from operations 3 936 2 965

Investments in tangible assets and businesses -1 551 -1 303

Sales of tangible assets and businesses 551 554

Changes in equity securities -56 3

Cash flow after investments before financing 2 880 2 219

Change in loans -986 -1 994

Change in pensions 17 -323

Change in long-term financial assets -62 -12

Cash dividends, AB SKF shareholders -455 -228

Cash effect on short-term financial assets 1 394 -338

Change in short-term financial assets January 1 1 976 2 353

Cash effect 1 394 -338

Exchange rate effect 111 -39

December 31 3 481 1 976

Change in net interest-bearing liabilities Opening Exchange rate Change in Acquired and Closing

balance effect loans/assets sold companies balance

Loans, long- and short-term 5 976 42 -986 -64 4 968

Provisions for pensions 6 478 322 17 -71 6 746

Financial assets, long-term -918 -99 -62 3 -1 076

short-term -1 976 -111 -1 394 - -3 481

Net interest-bearing liabilities 9 560 154 -2 425 -132 7 157

* Previously published amounts have been restated since the items included in Net interest-bearing liabilities are

disclosed individually in the cash flow analysis.

10

Enclosure 4

CONSOLIDATED FINANCIAL INFORMATION - QUARTERLY COMPARISONS (GROUP)

(MSEK unless otherwise stated)

Full Full Full

year year year

1998 1/99 2/99 3/99 4/99 1999 1/00 2/00 3/00 4/00 2000

Net sales 37 688 9 308 9 612 8 473 9 300 36 693 9 822 10 072 9 495 10 459 39 848

Operating profit/loss -999 476 527 666 851 2 520 938 904 891 941 3 674

Profit/loss before taxes -2 063 273 345 458 693 1 769 770 739 732 761 3 002

Earnings/loss per share

after tax, SEK -14.40 1.60 1.70 2.80 3.66 9.76 4.37 3.75 4.44 4.67 17.23

Solvency, % 29.0 29.2 29.0 31.7 33.8 33.8 34.1 34.2 35.6 37.2 37.2

Additions to tangible

assets 2 148 262 320 295 353 1 230 249 282 394 463 1 388

Net worth per share, SEK 96 95 95 96 100 100 103 104 113 119 119

Return on capital

employed for the latest

12-month period, % -2.8 -3.6 -4.1 1.2 11.2 11.2 13.1 14.8 15.8 16.2 16.2

11

Enclosure 5 CONSOLIDATED FINANCIAL INFORMATION - QUARTERLY COMPARISONS (DIVISIONS)

(MSEK unless otherwise stated)

Full Full Full

year year year

1998 1/99 2/99 3/99 4/99 1999 1/00 2/00 3/00 4/00 2000

Industrial Division

External Sales 8 323 2 139 2 094 1 840 1 938 8 011 2 162 2 126 2 062 2 255 8 605

Total sales 13 147 3 469 3 705 3 489 3 833 14 496

Operating result 961 371 418 411 388 1 588

Invested capital 6 915 7 022 7 149 7 338 7 427 7 427

Registered number of employees 10 346 10 409 10 515 10 589 10 571 10 571

Automotive Division

External Sales 8 583 2 147 2 260 1 966 2 154 8 527 2 310 2 291 2 022 2 259 8 882

Total sales 9 676 2 512 2 603 2 255 2 513 9 883

Operating result 237 124 127 60 65 376

Invested capital 5 697 5 750 5 822 6 081 5 965 5 965

Registered number of employees 8 378 8 373 8 369 8 378 8 386 8 386

Electrical Division

External Sales 1 625 406 395 324 350 1 475 404 403 372 396 1 575

Total sales 5 949 1 556 1 642 1 431 1 540 6 169

Operating result 219 93 138 121 108 460

Invested capital 3 544 3 541 3 380 3 545 3 467 3 467

Registered number of employees 5 620 5 596 5 209 5 202 5 166 5 166

Service Division

External Sales 11 564 2 743 2 870 2 714 3 053 11 380 2 939 3 232 3 206 3 467 12 844

Total sales 12 173 3 133 3 473 3 462 3 786 13 854

Operating result 848 206 259 280 268 1 013

Invested capital 3 813 4 058 4 434 4 277 4 228 4 228

Registered number of employees 4 189 4 316 4 384 4 469 4 507 4 507

Seals Division

External Sales 3 559 926 997 914 913 3 750 1 056 1 050 1 018 1 006 4 130

Total sales 4 313 1 238 1 210 1 122 1 158 4 728

Operating result 49 39 58 31 -1 127

Invested capital 2 850 2 853 2 884 3 170 2 954 2 954

Registered number of employees 4 378 4 372 4 346 4 350 4 248 4 248

Steel Division

External Sales 1 776 430 429 320 393 1 572 487 472 395 484 1 838

Total sales 4 057 1 205 1 184 961 1 131 4 481

Operating result 54 73 57 21 22 173

Invested capital 2 566 2 562 2 582 2 552 2 663 2 663

Registered number of employees 3 414 3 541 3 633 3 623 3 601 3 601

The financial information per Division is based on SKF's Management reporting, which in certain areas differs from the Group

reporting. The sum of operating results and invested capital for the Divisions therefore differs from the reported Group figures.

Total sales are sales and deliveries to external and internal customers.

Invested capital is defined as the sum of Inventories, external Trade Accounts Receivable and Tangible Assets less external Trade

Accounts Payable.

Previously published amounts for external sales have been restated to conform to current Group structure.